The negotiation process consists of 6 distinct stages, all of which revolve around effective communication. The culture of the negotiating parties plays a significant role in how they communicate and ultimately determines their success in achieving their goals.
- preparation;
- establishment of negotiator identities and the tone for the interaction;
- information exchange;
- exchange of items to be divided;
- closing the deal;
- maximizing the joint returns. ” (Craver, 2004)
Preparation
Gather all the required information about economic matters, including any applicable legal or political issues (Craver, 2004), when buying a car. Consider your ability to make a down payment and obtain adequate insurance coverage. Also, make sure that the chosen car meets the clean air standards in your state. Set your minimum acceptable terms and conditions.
According to Craver (2004), it is crucial to remember that having no deal is better than having a poor one. To demonstrate, consider if you would be satisfied with any red sports car or if it has to be specifically a Mustang. Similarly, contemplate whether you would agree to a blue Mustang at the right price or if it also needs to have an excellent engine. It is essential to understand both your opponent’s bottom line and your own. Also, familiarize yourself with the dealer’s price range for the exact model you desire. If the dealer aims to clear out last year’s models, they might be more willing to offer a better deal. Lastly, determine your goals for this negotiation and what specific outcome you wish for (Craver, 2004).
When negotiating for multiple items/issues, it is important to have specific goals for each. For instance, you may simply want a great deal on a red sports car, or you may be willing to settle for a fair deal on a red Mustang. The role of culture also comes into play. It is crucial to consider your opponent’s cultural background and values. Some cultures prioritize having clear and organized goals, while others may have different perspectives. It is essential for negotiators to understand these cultural values and employ them pragmatically instead of making judgments. For instance, Americans tend to view negotiations as primarily competitive, whereas the Japanese see it as an opportunity for information exchange and a more cooperative process (Chang, 2006).
Establishment of negotiator identities and setting the tone for the interaction
The cultural background of negotiators becomes significant at this point. Americans, for instance, are known for their impatience as they are eager to swiftly reach the main points of a deal. Conversely, Mexicans prioritize spending time in social settings to acquaint themselves with their negotiating counterparts. Engaging in friendly conversations with opponents, such as small talk, helps alleviate anxiety about the negotiation process and increases the likelihood of achieving success.
Taking extra time to establish trust between negotiating opponents from different cultures is worthwhile. Having insight into your opponent’s culture is important for creating a mutually beneficial negotiating environment and establishing ground rules to prevent unintentional offenses due to personal or cultural differences from derailing negotiations (Craver, 2004).
The exchange of information is important.
It is crucial at this point to ask open-ended questions that encourage your opponent to talk and reveal significant information. If you desire your opponent to believe the information you provide is true, you should disclose it gradually and only when explicitly requested.
Pay careful attention to your opponent’s statements about their desires, necessities, and priorities. These can reveal potential opportunities that you can exploit to your advantage in order to secure a more advantageous deal. Prolonged moments of silence, in particular, often prompt people to speak, and it is during these conversations that they may disclose valuable information (Craver, 2004). It is important to consider the cultural context of your opponent and how they perceive silence. For instance, if your opponent is Chinese, they may appreciate silence as a valuable asset while considering talkativeness as ostentatious or immature behavior (Chang, 2006).
Exchange of items to be divided
During the negotiation stage, the focus transitions from considering the opponent’s needs and priorities to expressing one’s own needs and priorities. The objective is to generate value for one’s own side and seek equivalent value in return. This stage is marked by a high level of competitiveness. Disagreements often arise regarding the perceived value of items on both sides and whether the opposing side is providing adequate value in exchange. It is essential to handle these disagreements fairly, even when negative tactics such as threats are used to prompt action from either side (Craver, 2004).
Chang (2006) emphasizes that in particular cultures, like Chinese culture, interpersonal relationships play a crucial role during business negotiations. Therefore, using tactics of threats and intimidation can lead to unfavorable consequences.
Successfully sealing the deal
Both parties in the agreement are motivated to finish it, although one is more eager than the other. The party that is more anxious will probably give in more often. Thus, it is essential to stay patient and composed to reach your objectives (Craver, 2004). Additionally, comprehending their cultural viewpoint on time and its utilization is significant.
Do they believe urgent action necessitates more time for consideration, similar to the Chinese approach (Chang, 2006)? Furthermore, the sixth stage involves maximizing the collective returns through cooperation among the negotiating parties. In the preceding three stages, the parties may have intentionally over or under estimated the value of certain items for strategic reasons, resulting in incorrect valuations on either or both sides. This cooperative stage allows for the correction of these inefficiencies, fostering goodwill between the parties and facilitating trades that enhance their joint returns.
